BRICS Accelerates the Launch of Its Own Currency

The launch of its own currency will be one of the central topics of the BRICS Summit in Johannesburg on August 22-24, 2023

Initially, the new currency will be used for commercial payments and will be backed by gold. 40% of the world’s population lives in the BRICS countries. BRICS produce 25% of world GDP.

The BRICS group of countries that currently includes Brazil, Russia, India, China, and South Africa has accelerated the transition to their own commercial currency. According to international media, “this initiative poses a serious threat to the current global dominance of the dollar.”  According to Fortune newspaper, Washington considers the BRICS initiative “very serious and dangerous,” and for this reason “the new currency will have to face many challenges before it becomes a true financial reality” in a multipolar world. Currently, 88% of international transactions are carried out in dollars, and 58% of the international reserves of the world’s countries are denominated in US currency.

The issue of its own currency that should be backed by gold will be one of the central issues on the agenda at the next BRICS summit scheduled in Johannesburg, South Africa, for August 22-24.

Over the past year, especially due to the introduction of unprecedented Western anti-Russian sanctions, the BRICS countries, primarily Russia, China, and Brazil, have switched to using their own national currencies in bilateral trade. In addition, according to Fortune, Saudi Arabia, the United Arab Emirates, and Iraq are looking for alternative forms of settlement with the dollar.

In the opinion of Les Echos newspaper, “the transition of BRICS to their own currency will significantly accelerate the process of de-dollarization in the world.” The columnist Claire Bargeles of Les Echos reminded that “more than 40% of the world’s population lives in the BRICS countries, which produce 25% of world GDP.” This is more than enough to foster strong currency ambitions “designed to protect the future multipolar world, never again to be dominated by either the US or, more generally, the West,” Bargeles pointed out.

On May 29, Brazilian President Luiz Inacio Lula da Silva said he “dreams” of introducing a single BRICS currency to “challenge the hegemony of the dollar.”

About twenty countries of the world, including Egypt, Saudi Arabia, Venezuela, and Ethiopia recently announced their intention to join BRICS that has its own credit organization, the New Development Bank (NDB), with operational headquarters in Shanghai, China. The BRICS group was formed by Brazil, Russia, India, and China on June 16, 2009 at the St. Petersburg International Economic Forum, and South Africa joined the group as a full member two years later, in 2011.